GSA awards $153M courthouse construction contract to Hensel Phelps Construction Co. under full and open competition

Contract Overview

Contract Amount: $153,358,549 ($153.4M)

Contractor: Hensel Phelps Construction CO

Awarding Agency: General Services Administration

Start Date: 2018-01-16

End Date: 2023-08-30

Contract Duration: 2,052 days

Daily Burn Rate: $74.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Construction

Official Description: AWARD OF THE BRIDGING DESIGN-BUILD CONSTRUCTION SERVICES FOR THE NEW US COURTHOUSE, NASHVILLE, TN

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37203

State: Tennessee Government Spending

Plain-Language Summary

General Services Administration obligated $153.4 million to HENSEL PHELPS CONSTRUCTION CO for work described as: AWARD OF THE BRIDGING DESIGN-BUILD CONSTRUCTION SERVICES FOR THE NEW US COURTHOUSE, NASHVILLE, TN Key points: 1. Contract awarded for bridging design-build construction services for a new U.S. Courthouse in Nashville, TN. 2. The contract utilized a firm-fixed-price structure, indicating a defined cost for the project. 3. Awarded through full and open competition, suggesting a robust bidding process. 4. The project duration spans over 2000 days, highlighting the long-term nature of the construction. 5. The North American Industry Classification System (NAICS) code 236220 points to commercial and institutional building construction. 6. The contract was awarded by the General Services Administration (GSA), a key federal agency for building management.

Value Assessment

Rating: good

The contract value of $153.4 million for a new U.S. Courthouse in Nashville appears to be within a reasonable range for a project of this scale and complexity. Benchmarking against similar federal courthouse construction projects would provide a more precise assessment, but the firm-fixed-price nature suggests that the government has secured a defined cost. The duration of over 2000 days also indicates a significant undertaking, justifying the awarded amount.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 7 bids indicates a healthy level of competition for this significant construction project. This competitive environment generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by driving down costs through multiple bids. It also promotes fairness and transparency in the procurement process.

Public Impact

The primary beneficiaries are the U.S. judicial system and the public in Nashville, TN, who will gain a new courthouse facility. The project will deliver essential construction services for a critical piece of federal infrastructure. The geographic impact is localized to Nashville, Tennessee, but the facility will serve federal court functions. The construction phase will likely create numerous jobs in the local and regional construction workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long project duration could introduce risks related to material cost fluctuations and labor availability.
Firm-fixed-price contracts can sometimes lead to contractors cutting corners if not adequately overseen.
Dependence on a single prime contractor for a large-scale project carries inherent execution risks.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process that can mitigate price risks.
The GSA's extensive experience in managing large construction projects suggests robust oversight capabilities.
The firm-fixed-price contract provides cost certainty for the government, assuming proper execution.

Sector Analysis

The contract falls within the Commercial and Institutional Building Construction sector, a significant segment of the construction industry. Federal building projects, especially courthouses, are substantial undertakings that require specialized expertise in design, engineering, and construction management. The GSA is a major player in this sector, managing a vast portfolio of federal properties. Comparable spending benchmarks would involve analyzing the cost per square foot or per project for similar federal courthouses or large public buildings constructed in recent years.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. Given the scale of the project, it is likely that the prime contractor, Hensel Phelps Construction Co., will engage subcontractors. Further analysis would be needed to determine if small business subcontracting goals were included in the contract terms and how effectively they are being met.

Oversight & Accountability

The General Services Administration (GSA) is responsible for overseeing this contract. As a major federal agency, the GSA has established procurement regulations and oversight mechanisms to ensure accountability and transparency. The firm-fixed-price contract structure provides a degree of cost control. Inspector General oversight may be applicable depending on the specific GSA policies and the nature of any potential issues that arise during the contract's lifecycle.

Related Government Programs

Federal Courthouse Construction
Public Building Construction
Design-Build Contracts
General Services Administration Procurement

Risk Flags

Long project duration
Firm-fixed-price risk
Potential for cost escalation

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $153.4 million to HENSEL PHELPS CONSTRUCTION CO. AWARD OF THE BRIDGING DESIGN-BUILD CONSTRUCTION SERVICES FOR THE NEW US COURTHOUSE, NASHVILLE, TN

Who is the contractor on this award?

The obligated recipient is HENSEL PHELPS CONSTRUCTION CO.

Which agency awarded this contract?

Awarding agency: General Services Administration (Public Buildings Service).

What is the total obligated amount?

The obligated amount is $153.4 million.

What is the period of performance?

Start: 2018-01-16. End: 2023-08-30.

What is Hensel Phelps Construction Co.'s track record with similar federal construction projects?

Hensel Phelps Construction Co. has a significant track record in large-scale construction projects, including numerous federal facilities. They have been involved in building courthouses, federal office buildings, and other public infrastructure across the United States. Their experience often includes complex projects requiring design-build capabilities, similar to the Nashville courthouse contract. Reviewing their past performance on projects of comparable size and complexity, particularly those managed by the GSA or other federal agencies, would provide insight into their ability to deliver on time and within budget. Past performance evaluations and any documented issues or successes on previous federal contracts would be key indicators.

How does the awarded amount compare to the estimated cost or budget for this courthouse project?

The provided data shows the awarded amount ($153,358,549) but does not include the initial estimated cost or the approved budget for the New U.S. Courthouse in Nashville, TN. To assess value for money, a comparison between the awarded price and the government's pre-solicitation estimate or the Congressional budget allocation for the project is crucial. If the awarded amount is significantly lower than the estimate, it suggests successful competition and potentially good negotiation. Conversely, if it's higher, it might indicate unforeseen complexities or a less competitive bidding environment than anticipated. Without the estimated cost, a definitive value assessment is challenging.

What are the primary risks associated with a firm-fixed-price contract for a multi-year construction project?

Firm-fixed-price (FFP) contracts offer cost certainty to the buyer but can expose the contractor to significant financial risk if costs escalate beyond projections. For a multi-year construction project like the Nashville courthouse, key risks include: 1) Material Price Escalation: Fluctuations in the cost of construction materials (steel, concrete, etc.) over the project's duration can erode contractor profit margins. 2) Labor Cost Increases: Rising wages or shortages of skilled labor can impact project timelines and costs. 3) Unforeseen Site Conditions: Discovering unexpected geological issues or environmental hazards can lead to significant change orders and cost overruns, which under an FFP contract, the contractor may have to absorb or negotiate extensively. 4) Scope Creep: While FFP aims to fix the scope, changes requested by the government can lead to disputes over cost adjustments. Effective risk mitigation involves detailed contract clauses, contingency planning by the contractor, and diligent government oversight.

What is the typical duration for federal courthouse construction projects of this magnitude?

The duration of federal courthouse construction projects can vary significantly based on factors such as size, complexity, location, design-build vs. traditional methods, and funding availability. A project duration of 2052 days (approximately 5.6 years) for a new U.S. Courthouse, as indicated for this Nashville project, is substantial but not necessarily unusual for a large-scale federal building. Many federal courthouses involve intricate security requirements, specialized court functions, and extensive public spaces, necessitating a lengthy design and construction process. Shorter durations might be achievable for smaller facilities or through highly streamlined design-build processes, while larger, more complex courthouses could extend beyond this timeframe. Benchmarking against other recently completed federal courthouses of similar square footage and functional requirements would provide a clearer context.

How does the GSA ensure quality control and compliance with building codes and standards in its construction contracts?

The GSA employs a multi-faceted approach to ensure quality control and compliance in its construction contracts. This typically involves: 1) Detailed Specifications and Standards: Contracts include rigorous specifications outlining required materials, construction methods, and performance standards, often referencing established industry codes (e.g., IBC, NFPA) and GSA's own design guidelines. 2) Design Reviews: The GSA conducts thorough reviews of the design documents at various stages to ensure compliance and constructability. 3) Construction Oversight: Resident engineers and project managers from the GSA, or contracted third-party inspectors, are typically assigned to projects to monitor progress, inspect work, and ensure adherence to plans and specifications. 4) Testing and Commissioning: Materials testing and final commissioning of building systems are conducted to verify performance and compliance. 5) Contractor Performance Management: The GSA monitors the contractor's quality control plan and performance throughout the project lifecycle, utilizing systems like the Contractor Performance Evaluation Reporting System (CPARS).

Industry Classification

NAICS: Construction › Nonresidential Building Construction › Commercial and Institutional Building Construction

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCTION OF BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: GS-04-P-17-BV-C-0001

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6557 HAZELTINE NATIONAL DR STE 1, ORLANDO, FL, 32822

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $153,358,549

Exercised Options: $153,358,549

Current Obligation: $153,358,549

Actual Outlays: $14,001,662

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline